IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/kanematsu-electronics-ltd" target="_blank" data-smartkarma-citation="entities:15767:1" rel="noopener">Kanematsu Electronics (8096 JP)</a> has recommended <a href="https://www.smartkarma.com/entities/kanematsu-corp" target="_blank" data-smartkarma-citation="entities:5810:1" rel="noopener">Kanematsu Corp (8020 JP)</a>’s tender offer of JPY6,200 per share, an 32.9% premium to the undisturbed price (27 January).</li>
<li>The transaction is a two-step acquisition through a cash tender offer and subsequent squeeze-out. The lower limit of the offer has been set to meet the 66.67% ownership ratio.</li>
<li>The tender offer is attractive as it represents an all-time share price high and a premium to peer multiples. This suggests a done deal. </li>
</ul>



Kanematsu Electronics (8096 JP) has recommended Kanematsu Corp (8020 JP)’s tender offer of JPY6,200 per share, an 32.9% premium to the undisturbed price (27 January).
The transaction is a two-step acquisition through a cash tender offer and subsequent squeeze-out. The lower limit of the offer has been set to meet the 66.67% ownership ratio.
The tender offer is attractive as it represents an all-time share price high and a premium to peer multiples. This suggests a done deal. 


Kanematsu Electronics (8096 JP): JPY6,200 Tender Offer from Kanematsu Corporation

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Equity Bottom-Up

<ul>
<li>On 28 April 2022, with full-year earnings, <a href="https://www.smartkarma.com/entities/fujitsu-ltd" target="_blank" data-smartkarma-citation="entities:16968:1" rel="noopener">Fujitsu Ltd (6702 JP)</a> announced a buyback programme to buy back up to 12mm shares (6.11% of shares out) for up to ¥150bn</li>
<li>That was when the shares were ¥18,540. The shares popped 10% in 2 days. Then fell 25% into end-September. Yesterday, they announced they'd bought back 1.9mm shares in November.</li>
<li>Those were the first shares bought back under the Programme. And that leaves 4 months and a lot of stock to buy. </li>
</ul>


On 28 April 2022, with full-year earnings, Fujitsu Ltd (6702 JP) announced a buyback programme to buy back up to 12mm shares (6.11% of shares out) for up to ¥150bn
That was when the shares were ¥18,540. The shares popped 10% in 2 days. Then fell 25% into end-September. Yesterday, they announced they'd bought back 1.9mm shares in November.
Those were the first shares bought back under the Programme. And that leaves 4 months and a lot of stock to buy. 


Fujitsu (6702) Buyback Just Getting Started

Equity Capital Markets

Nomura Research Institute / Equity Capital Markets

<ul>
<li>On 25 November <a href="https://www.smartkarma.com/entities/nomura-research-institute-ltd" target="_blank" data-smartkarma-citation="entities:18129:1" rel="noopener">Nomura Research Institute Ltd (4307 JP)</a> announced that <a href="https://www.smartkarma.com/entities/jafco-co-ltd" target="_blank" data-smartkarma-citation="entities:8848:1" rel="noopener">Jafco Co Ltd (8595 JP)</a> and <a href="https://www.smartkarma.com/entities/nomura-holdings-inc" target="_blank" data-smartkarma-citation="entities:742:1" rel="noopener">Nomura Holdings (8604 JP)</a> would conduct a Secondary Offering of NRI Shares. </li>
<li>The sale is 36.97mm shares plus a greenshoe. It's a big deal ($1bn) including greenshoe after JPY has just strengthened, but underperformance both before and after announcement sets up well. </li>
<li>Expect weakness today, but the stock is now at a two-year low, and the PER multiple premium is now at the lowest 3mo average premium in 5yrs. Expect retail buying.</li>
</ul>


On 25 November Nomura Research Institute Ltd (4307 JP) announced that Jafco Co Ltd (8595 JP) and Nomura Holdings (8604 JP) would conduct a Secondary Offering of NRI Shares. 
The sale is 36.97mm shares plus a greenshoe. It's a big deal ($1bn) including greenshoe after JPY has just strengthened, but underperformance both before and after announcement sets up well. 
Expect weakness today, but the stock is now at a two-year low, and the PER multiple premium is now at the lowest 3mo average premium in 5yrs. Expect retail buying.


NRI (4307) Likely Prices Today - Expect Weakness Then Strength

Executive Director, Metrical Inc

Aki Matsumoto

Executive Director

Independent Leading Corporate Governance Research

Metrical Inc

METRICAL INC. is an independent leading Corporate Governance research firm in Japan where Corporate Governance is increasingly recognized as an important element on corporate management in these days. Thus, CG research and solutions would become an essential component of global capital markets and play important to contribute to transparency of the markets and maximize shareholders’ value in Japan. 

METRICAL INC. provides Corporate Governance research and analysis including rating services, and  also offers investment research and IR services with solutions and customized profound research on CG and IR issues.

<ul>
<li>I will discuss the points on the Nikkei article, "TSE Reorganization Leads to Shareholder Proposal: British Fund to Subsidiary of Nippon Steel Corporation."</li>
<li>Since the parent-subsidiary listing is related to the parent company's market capitalization, I don't believe that the issue is one that can be postponed so long.</li>
<li>NSSOL, which maintains stable profitability and cash generation, is expected to see its share price rise further if NSSOL becomes independent and foreign shareholding will increase.</li>
</ul>


I will discuss the points on the Nikkei article, "TSE Reorganization Leads to Shareholder Proposal: British Fund to Subsidiary of Nippon Steel Corporation."
Since the parent-subsidiary listing is related to the parent company's market capitalization, I don't believe that the issue is one that can be postponed so long.
NSSOL, which maintains stable profitability and cash generation, is expected to see its share price rise further if NSSOL becomes independent and foreign shareholding will increase.


Is It Really Better for Shareholders if NISSOL Remains a Subsidiary of Nippon Steel Corporation?

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

NTT (Nippon Telegraph & Telephone) / Event-Driven

<ul>
<li>On 7 April, the JPX announced the changes to the Free Float Weights (FFW) for the TOPIX Index. There are some big changes due to the updated FFW methodology.</li>
<li>From April to June, we see a one-way turnover of 2.87% and a one-way trade of ¥2,285bn. Some stocks have opposite way flows in different months.</li>
<li>Stocks with inflows outperformed stocks with outflows from Oct-Dec 2021 before giving up all the gains. These stocks have started to outperform and could continue outperforming over the next quarter.</li>
</ul>


On 7 April, the JPX announced the changes to the Free Float Weights (FFW) for the TOPIX Index. There are some big changes due to the updated FFW methodology.
From April to June, we see a one-way turnover of 2.87% and a one-way trade of ¥2,285bn. Some stocks have opposite way flows in different months.
Stocks with inflows outperformed stocks with outflows from Oct-Dec 2021 before giving up all the gains. These stocks have started to outperform and could continue outperforming over the next quarter.


TOPIX FFW Transition - Big Flows from April to June

Japan

NS Solutions Corporation operates system consulting services and proposal of solutions.  The Company also manages operation and maintenance of engineering systems and develops software.

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NS Solutions (2327 JP)

Kanematsu Electronics (8096 JP): JPY6,200 Tender Offer from Kanematsu Corporation

The tender offer is attractive as it represents an all-time share price high and a premium to peer multiples. This suggests a done deal.

Arun George

Fujitsu (6702) Buyback Just Getting Started

Fujitsu announced their buyback many months ago (late April 2022) but bought nothing til last month when they were 15%. Expect 11-15% of volume...

Travis Lundy

NRI (4307) Likely Prices Today - Expect Weakness Then Strength

NRi has underperformed Peers since its announcement. It's current PER multiple to the Peer Average matches the lowest 3-month average premium seen...

Travis Lundy

Is It Really Better for Shareholders if NISSOL Remains a Subsidiary of Nippon Steel Corporation?

I would like to discuss the points on the Nikkei article, "TSE Reorganization Leads to Shareholder Proposal: British Fund to Subsidiary of Nippon...

Metrical Inc

TOPIX FFW Transition - Big Flows from April to June

Changes to the Topix FFW methodology will result in a turnover of 2.87% & trade of ¥2,285bn from April to June. There is a lot to trade on some...

Brian Freitas

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